| Population (World Bank 2011) | 81,726,000 million |
| Surface area | 357,021 km² |
| Capital | Berlin |
| GDP (PPP), IMF 2010 estimate, per capita | USD40,631 |
| GDP (nominal), IMF 2010 estimate, per capita | USD47,934 |
| Currency | Euro (EUR) |
| Corruption level (Transparency International Corruption Perception Index 2012; 10.0-9.0 = very clean, 0.0-0.9 = highly corrupt) | 7.9 (ranking: 13) |
| Current government | Centre-right coalition (Christian Democratic Union/Christian Social Union, Free Democratic Party) |
| Three largest cities | Berlin, Hamburg, Munich (München) |
| Baltic Sea Coastal regions | Schleswig-Holstein, Mecklenburg-Western Pomerania |
By Tobias Etzold
In managing the European sovereign debt crisis, Germany continues to play a lead role, causing some consternation among its European partners. The government urged South-European crisis states to implement far-reaching reforms and launched a fresh debate on EU reforms. The domestic power base of the current conservative-liberal government eroded significantly further due to a series of defeats in regional elections. The federal elections in September could result in a partial change of government. Economically, Germany continues to do fairly well. In the Baltic Sea Region, Germany has taken on a comparatively active stance during its one-year presidency of the CBSS in 2011/12. The country remains active within the EUSBSR and has rediscovered its interest in the CBSS.
Government
In Germany, the parties forming the federal government, Christian Democrats (CDU) and Liberal Democrats (FDP), continued 2011’s trend of suffering defeats in state elections. In two states, Schleswig-Holstein in May 2012 and Lower Saxony in January 2013, voters ousted CDU-led governments from office. Although in both states the CDU remained the largest party in parliament and the FDP did much better than expected, they lost marginally to the Social Democrats (SPD) and the Green Party. In Schleswig-Holstein, the latter were able to form a coalition government jointly with the Danish Minority’s Party, while in Lower Saxony they obtained a one seat majority. In tiny Saarland, Germany’s first ever ‘Jamaica coalition’ of CDU, FDP and Greens was terminated by CDU Prime Minister Annegret Kramp-Karrenbauer in January 2012 due to internal problems within the FDP. In snap elections in March 2012, the CDU became the largest party in parliament, while the FDP lost its parliamentary representation. Consequently, the CDU formed a grand coalition government with runner-up SPD. A coalition of the same kind was formed in Berlin after regional elections in September 2011. Snap elections were also held in North Rhine-Westphalia (NRW) in May 2012. The red-green minority government had collapsed a couple of months earlier owing to a lack of support from the opposition parties for the budget. In the elections, SPD and Greens gained an absolute majority and were able to form a stable government. The CDU suffered a resounding defeat, receiving just 26% of the overall votes. This was the party’s worst ever result in NRW.
After their victory in Lower Saxony, the federal red-green opposition gained the absolute majority in the Bundesrat (federal assembly) which can effectively obstruct almost any major legislative project. This constellation makes it difficult for the federal government to get any legislative act through the chamber.
In February 2012, federal President Christian Wulff resigned after facing harsh criticism on his blurry private financial activities. He was already the second President under the Merkel government who resigned, or was forced to resign, within less than two years. He was succeeded by Joachim Gauck, a protestant vicar and former GDR civil rights activist from Rostock.
Currently, the conservative-liberal government and the red-green opposition do not have an absolute majority in most national polls. However, owing to the unbroken popularity of federal chancellor Angela Merkel, the CDU remains the biggest party in recent polls by far, leading the SPD by more than 10%. The modest public support for the SPD is partially due to problems with its front-runner, Peer Steinbrück. The positive trend for the Green Party has continued. Although the party’s electoral support has shrunk to some 15%, compared to some polls in 2011, the party scored highly in state elections and has entered power in several states. In the upcoming federal elections, the party is likely to achieve its best ever federal electoral result. A coalition of CDU and Greens has not been completely excluded; it is in the current situation, however, still rather unlikely. The FDP continued to do poorly in the polls due to a lack in a clear political line and contents, party internal power struggles and ongoing disputes with the CDU, affecting the government’s performances considerably. The party even risks missing the 5% threshold. In such a case, a revival of a CDU/SPD grant coalition would be the most likely power option.
Policies
The so-called ‘Energiewende’ that has been adopted since the Fukushima disaster in spring 2011 still forms one of the major challenges for the government. This essential reform, involving the phasing out of nuclear energy and a massive increase in the share of renewable energies, has recently slowed down considerably and still faces much resistance from industry, politics and society. The costs for its implementation will be tremendously high.
Germany’s federal electoral law has been questioned, due to inconsistencies and complexity, by the Constitutional Court, which consequently urged the federal parliament to develop a reform. In February 2013 a large majority of parliament adopted a new law, but it is a classical compromise between most parties. It will create compensation for the other parties if one party gains more seats through votes for direct candidates than it would be entitled to on the basis of the percentage of votes for the party. In many policy areas, the trend continues that the Constitutional Court works out the outlines for legislative acts. The same phenomenon occurred in February 2013 when the Court issued a groundbreaking judgement, urging the equal legal treatment of homosexual couples, in particular concerning fiscal law and the right to adopt children.
Within the EU, Germany continues to play a leading role without intending to dominate; however, it is frequently accused of such by other countries. The government sets the tone in the management of the European sovereign debt crisis and also pushed for EU-institutional reforms and a fresh constitutional debate. In 2012, Foreign Minister Westerwelle initiated a thinking process by inviting several of his EU colleagues to discuss the future of Europe and to elaborate ideas and proposals for reform.
After a short interruption in 2011 when Germany did not follow the international line on Libya, Germany’s foreign policies returned to traditional lines. In autumn 2012, the government sent some troops and patriot missiles to the Turkish-Syrian border in order to support NATO partner Turkey in case of a Syrian attack. German troops have not been involved in the French-led military operation in Mali in winter 2013, but Germany supports France and its African allies politically and materially.
Economic situation and anti-crisis strategies
Compared to most other Eurozone countries, Germany is doing well economically. While having been the ‘sick man’ of Europe in economic terms until only about ten years ago, Germany now stands as the ‘strong man’ at the top of Europe in many respects, economically and politically. The current government profits from some essential reforms and measures the previous red-green government, as well as the 2005-9 grant coalition, put in place. These reforms have started to have an effect, in particular on the labour market. The current unemployment rate is 7.4% (less than 3 million), which is comparatively low. However, the CDU/FDP government has done little in terms of economic reforms on its own initiative, to a large degree due to coalition internal squabbles. That the country has by and large gone fairly untouched through the European crises is mainly due to the country’s solid economic infrastructure and a huge demand for products of German quality, not so much to wise and reform-oriented political actions. While the German government urges other European countries to implement far-reaching economic and political reforms based on the principle of austerity, specific measures to cut national public spending significantly have not been too obvious. The country continues to suffer from high public debt levels. Many cities and several states are practically bankrupt. The German tax system is unnecessarily complicated and inefficient and is in urgent need of a radical reform.
Germany and the Baltic Sea Region
Germany’s interest, engagement and commitment in the BSR were revitalised during its Council of the Baltic Sea States (CBSS) Presidency in 2011/12. Since then, the federal government seems to have rediscovered its interest in the CBSS, emphasising the Council as the most important political co-operation structure in the BSR. Its active presidency has been much appreciated by its partners around the Baltic Sea. Nonetheless, the country’s engagement in the BSR slightly decreased again after handing over the presidency to Russia. Overall, the federal government continues to lack an explicit and coherent BSR policy. The three northern states Schleswig-Holstein, Mecklenburg-West Pomerania and Hamburg remained active in Baltic Sea affairs during 2012/13 and continue to play an important role in the implementation of the EU Strategy for the Baltic Sea Region (EUSBSR) through their leading roles in several priority areas. Overall, the BSR-related activities of both the federal government and the states need to be linked and co-ordinated better in terms of an efficient division of labour.
According to the new EUSBSR action plan, Germany has taken on the responsibility for four priority areas: natural zones and biodiversity, innovative education and youth, tourism and culture. While the former priority is co-ordinated by the federal government, the latter three have been assigned to the state governments of Hamburg (education) and Mecklenburg-West Pomerania (tourism). The new action plan introduced a new priority area dealing with the BSR’s common culture and cultural identity. Schleswig-Holstein was among those that pushed for that new priority area and will take on the role of priority area co-ordinator, jointly with Poland.
During the German CBSS Presidency, the government was fairly active and (co-) organised an impressive number of conferences, meetings and workshops covering a broad thematic range. In a series of special events, the CBSS’s inauguration on 6 March 1992 was commemorated. The priorities of the German Presidency covered the five long-term priority areas of the CBSS, continuing ongoing activities in all those areas. Additionally, Germany put an emphasis on the south eastern Baltic Sea Region, including Kaliningrad, striving for modernisation through co-operation. In order to be able to conduct tangible and innovative projects, primarily with a focus on small and medium enterprises and public-private partnerships, a CBSS project fund and a credit line of EUR100 million have been established by the German Bank for Reconstruction and its Russian counterpart. Another priority of the German Presidency was the creation of a ‘coherent framework for co-operation’ in the region, linking the various structures of Baltic Sea co-operation more closely together and striving for a ‘smart division of labour’. The German CBSS Presidency has made a valuable effort in this respect, starting a discussion and consultation process. The Baltic Sea Days in Berlin in April 2012 formed an impressive highlight of the Presidency. They attracted hundreds of stakeholders from the entire BSR and even high-level participation, contributed to BSR branding and provided proof of a potential to increase the awareness of the region among the German public, politics and media. The Baltic Sea States Summit of heads of government in Stralsund on 30 and 31 May 2012 discussed primarily energy and demographic development. Overall, the German Presidency has achieved its goals and revitalised the regional political dialogue.
Outlook
The next general election in September 2013 is likely to slightly change the political constellations. Since both the right-wing and the left-wing blocks are unlikely to gain a majority of their own, a new grand collation of CDU and SPD may result. A black-green, a red-red-green and a Jamaica coalition are in theory plausible but are in practice rather unrealistic. As long as Germany’s economy is doing comparatively well, the country will continue to play a leadership role within the EU. In the BSR, owing to various dependencies, it is in Germany’s own interest to remain active and to develop more sustainable and uniform regional policies. Germany and the other countries of the region share various political and economic interests and values. On that basis, they would be natural allies in a wider European context, provided that Germany is ready to co-operate more closely with them, also with an eye on relevant EU decision-making processes. Germany will play a key role in utilising the soft power potential of the BSR in order to contribute to solving the EU’s current problems.